GM and Chrysler may get new bailout deal

The US government is understood to be finalising a bailout deal for General Motors and Chrysler using money set aside to help ailing banks. An announcement could be made as early as tomorrow (December 17).

The new deal comes after the original $14bn (£9.4bn) bailout of the US car industry failed to get enough support in a vote in the Senate last Friday. The new funds will come from the $700bn (£460bn) funding pool originally set aside to keep banks from collapse.

Government officials say the money would be offered to General Motors and Chrysler to keep them from going bankrupt next year, as long as they could prove they would survive and could still compete.

Both GM and Chrysler have warned that they could run out of money next year without a cash-injection. Reports suggest GM will be offered $8bn (£5.25bn) and Chrysler $6bn (£4bn).

Ford will be able to request funds if its financial situation worsens, but will not be offered money at present. Alan Mulally, the company’s chief executive, has vowed to work for an annual salary of $1 (69p), instead of $2m ($1.4m), if the carmaker accepts aid.

In the UK, the government is expected to unveil a limited aid package for beleaguered car manufacturers this week in a bid to prevent thousands of potential job losses. A majority of manufacturers have now stopped production for Christmas, a week earlier than usual.

Latest from Marketing Week

PLEASE SIGN IN OR REGISTER. IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and inspiration that will help you develop as a marketer and leader.

Register and receive the best content from the only title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work, so we can make Marketing Week more relevant to you.

Register now

THE BEST CONTENT

Our award winning editorial team and columnists will ask the biggest questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we will be your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Dedicated to developing your skills and helping you achieve marketing excellence. Find guidance on leadership, professional development and the latest industry jobs.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here